"double irish"

IRS sues Facebook for $9bn

The IRS is suing Facebook for $9bn over unpaid taxes, reports Reuters, targeting its licensing of "intellectual property" to its own Irish subsidiary to shift profits to that lower-taxed jurisdiction.

Under the arrangement, Facebook’s subsidiaries pay royalties to the U.S.-based parent for access to its trademark, users and platform technologies. From 2010 to 2016, Facebook Ireland paid Facebook U.S. more than $14 billion in royalties and cost-sharing payments, according to the court filing.

The company said the low valuation reflected the risks associated with Facebook’s international expansion, which took place in 2010 before its IPO and the development of its most lucrative digital advertising products.

The practice used to be called Double Irish but has become more elaborate in recent years with changes to the law; Ireland remains the hot place to store profits. Read the rest

Report: Skype and investor Silver Lake screwed employees out of stock options

Skype and Silver Lake, a large investor, recently fired a bunch of senior executives, allegedly to prevent their stock gaining real value in a forthcoming acquisition by Microsoft. Digging into the contracts' legalese reveals an obfuscated clause that decodes to something like "we can buy your stock back at the grant price, even if it has vested, prior to any sale of the company." Felix Salmon at Wired:

I no longer think that what Skype did here is pretty evil: I now think it's downright evil, and destroys the balance of trust on which Silicon Valley has been built. What's more, I simply don't believe that Skype did all of this itself, without detailed input from Silver Lake. ... I don't know where they got these techniques from, but they're very alien to Silicon Valley and indeed the rest of the business world. And they do no good at all for the reputation of private equity companies more generally.

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Microsoft to buy Skype for $8.5bn

Microsoft will buy Skype for $8.5bn in cash, reports the Wall Street Journal.

Skype will become a new business division within Microsoft, and Skype Chief Executive Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Mr. Ballmer.

Buying Skype--a service that links users via Internet-based telephony and video--gives Microsoft a recognized brand name on the Internet at a time when it is struggling to get more traction in the consumer market.

Microsoft to acquire Skype Read the rest